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Is the worst over? Alberta's GDP to grow in 2017, but full recovery will take time

CALGARY, Nov. 2, 2016 /CNW/ - While higher oil prices have created some optimism, Alberta's economy remains challenged as 2016 comes to a close. Today, ATB Financial is releasing its latest Economic Outlook for the province, providing insight into what may happen in the months ahead.

Capturing five primary economic indicators, the key results are:

Alberta's economy is forecast to contract by 2.6 per cent this year with growth of 2.1 per cent returning next year.

Despite the growth in GDP, unemployment in the province will remain high.

Oil and gas prices have rebounded somewhat, which is good news for our struggling petroleum sector.

For three consecutive quarters, the province has experienced net interprovincial out-migration.

"Our research suggests that the worst of the 2015/16 oil price downturn is now behind us," said Todd Hirsch, ATB's chief economist. "Oil prices should continue to grow modestly in 2017. That will bring stability to our province's petroleum sector, but not growth. Hiring and resumption of investment will be weak in 2017."

The forecast for agriculture next year looks promising, despite recent downturns in cattle and wheat prices. Forestry and tourism will continue to do well, with the latter potentially posting another record year in 2017. Construction and building services will also be boosted due to rebuilding efforts in Fort McMurray.

"The projected growth in our GDP is a good sign, but 2017 will still be a tough year as many Albertans will continue to be out of work," notes Hirsch. "Things are going in the right direction but employment levels will take time to catch up to the rise in GDP.

ATB Financial chief economist Todd Hirsch will be available for interviews with media today.